What,Can and Should Mclaren be Doing About Protecting Resale

What,Can and Should Mclaren be Doing About Protecting Resale

Author
Discussion

Steve7777

185 posts

90 months

Friday 10th May
quotequote all
They’re just making too many cars. The only way the market can absorb that many year after year flowing into the used market is if they reduce the cost of ownership so it’s an affordable proposition for a much wider customer base (e.g. traditional 911 buyers).

It would help to have a much cheaper limited warranty available that only covered the catastrophic costs, and then make it deliberately easy rather than difficult for indies to cover the other work, which they could do more cheaply.

BlackR8

192 posts

18 months

Friday 10th May
quotequote all
I think giving a standard 2 year warranty on any pre-owned car from a dealer for a starter would make a big difference (I suspect this is what really helps the Ferrari residuals for the older cars).

On depreciation, are the Mclarens that much worse than their competitors across the marques? only asking as just had a quick browse at 570s and its competitors say the Porsche 991 Turbo and Audi Gen 2 R8, and for 2014/2015 models which is when I think they came out, the 570s seems to start around £100k, whereas the 911 Turbo and R8 are now starting at £75-80k. I assume the McLaren was probably more expensive when new, but the depreciation on the surface seems in line with its rivals. (unless I am comparing the wrong cars here ofcourse!)

IMI A

6,572 posts

142 months

Friday 10th May
quotequote all
Here's cheapest good low miles 991 turbo s in UK.

http://www.nineexcellence.com/porsche-sales/sales-...

To save you doing the maths its held circa 67% of its original retail price 5-6 years on which is incredible. Mcl have some way to go to have their ordinary non LT vehicles doing that well. I'm hearing you can buy a virtually brand new 720s for £180k albeit not to your own spec. Thats not far off £100k off list on day 1!

cypriot

251 posts

40 months

Friday 10th May
quotequote all
IMI A said:
Here's cheapest good low miles 991 turbo s in UK.

http://www.nineexcellence.com/porsche-sales/sales-...

To save you doing the maths its held circa 67% of its original retail price 5-6 years on which is incredible. Mcl have some way to go to have their ordinary non LT vehicles doing that well. I'm hearing you can buy a virtually brand new 720s for £180k albeit not to your own spec. Thats not far off £100k off list on day 1!
Rather disingenuous post. You are quoting list price WITH NO OPTIONS for the turbo. So, using your method, a decently specced and relatively low milage 650s, 5 years old is £118k, which is 62% of its retail price. So, not too shabby, right?

MDL111

3,451 posts

118 months

Friday 10th May
quotequote all
cypriot said:
IMI A said:
Here's cheapest good low miles 991 turbo s in UK.

http://www.nineexcellence.com/porsche-sales/sales-...

To save you doing the maths its held circa 67% of its original retail price 5-6 years on which is incredible. Mcl have some way to go to have their ordinary non LT vehicles doing that well. I'm hearing you can buy a virtually brand new 720s for £180k albeit not to your own spec. Thats not far off £100k off list on day 1!
Rather disingenuous post. You are quoting list price WITH NO OPTIONS for the turbo. So, using your method, a decently specced and relatively low milage 650s, 5 years old is £118k, which is 62% of its retail price. So, not too shabby, right?
The sooner we get back to normality where the majority of sports cars loses about 50 percent of 3-5 years the better imo - then all these discussions as well as the “investment threads” and b.... fights over Porsche GT allocations will be over.
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isaldiri

4,508 posts

109 months

Friday 10th May
quotequote all
cypriot said:
Rather disingenuous post. You are quoting list price WITH NO OPTIONS for the turbo. So, using your method, a decently specced and relatively low milage 650s, 5 years old is £118k, which is 62% of its retail price. So, not too shabby, right?
Not quite. The turbo s was very well specced as base and wouldn't have needed much in options. It even came with ceramics as standard. You're going to be adding a heap more options on any McLaren than the TTS.

davek_964

5,464 posts

116 months

Friday 10th May
quotequote all
It's interesting that when depreciation of McLaren's is discussed, there are always some people that argue that it's the stability / rise in prices of the competition that has been abnormal, not the depreciation of McLaren's.

Whilst I agree that the bubble most high end cars have enjoyed recently is not normal - and is clearly coming to an end - why is it assumed that McLaren depreciation will now be in line with 'normal'? If one manufacturer is suffering heavy depreciation while it's competitors have strong residuals (and some of the reasons have been identified clearly in this thread) isn't it a bit optimistic to assume that they'll only continue to fall at the same rate as the competition?

They've suffered residuals in a buoyant market - I don't think that translates well into a market which seems to be slowing down quite significantly.

I also think the comments about 'if you can't afford the warranty, you can't afford the supercar' comments are interesting. That may well be true, but I guess the problem is there are plenty of people who could afford the initial capital outlay but not the running costs - and yet do feel they could afford the running costs of a £100k Ferrari.
But perhaps that's comparing apples with oranges? It's often said that the McLaren's are at least a generation ahead of the rivals. Maybe that's so, and it's simply the fact that this doesn't come for free - you pay for it in the running costs, and for various reasons in depreciation too.

For me, depreciation is probably the biggest thing stopping me from considering one. It just adds way too much to already high ownership costs. But I agree with the earlier posts - the fact that McLaren don't usually want their cars back is a big big negative.

Matty3

197 posts

25 months

Friday 10th May
quotequote all
Resale value does not currently concern me - I'll no doubt address that when I come to sell (which will not be for at least 2 years) - what irks me is non owners (and some former owners who feel stung on resale) telling me I should be bothered wink thoughts of depreciation would only diminish the fabulous McL ownership experience...

All top end sportscar owners will be having reality checks over the coming years - the pool of potential buyers will continue to shrink and values will continue to plummet until they reach a sustainable price level (buyers and sellers numbers converging). - as more secondhand cars come to the market when/if that happens is anyone's guess?- in these volatile times..There are currently far too many sellers (all marques) out there compared to buyers.






MDL111

3,451 posts

118 months

Friday 10th May
quotequote all
davek_964 said:
It's interesting that when depreciation of McLaren's is discussed, there are always some people that argue that it's the stability / rise in prices of the competition that has been abnormal, not the depreciation of McLaren's.

Whilst I agree that the bubble most high end cars have enjoyed recently is not normal - and is clearly coming to an end - why is it assumed that McLaren depreciation will now be in line with 'normal'? If one manufacturer is suffering heavy depreciation while it's competitors have strong residuals (and some of the reasons have been identified clearly in this thread) isn't it a bit optimistic to assume that they'll only continue to fall at the same rate as the competition?

They've suffered residuals in a buoyant market - I don't think that translates well into a market which seems to be slowing down quite significantly.

I also think the comments about 'if you can't afford the warranty, you can't afford the supercar' comments are interesting. That may well be true, but I guess the problem is there are plenty of people who could afford the initial capital outlay but not the running costs - and yet do feel they could afford the running costs of a £100k Ferrari.
But perhaps that's comparing apples with oranges? It's often said that the McLaren's are at least a generation ahead of the rivals. Maybe that's so, and it's simply the fact that this doesn't come for free - you pay for it in the running costs, and for various reasons in depreciation too.

For me, depreciation is probably the biggest thing stopping me from considering one. It just adds way too much to already high ownership costs. But I agree with the earlier posts - the fact that McLaren don't usually want their cars back is a big big negative.
I think you have a valid point. But I also think that a lot of the demand for certain cars is driven by the current expectation that they have good residuals/you can drive them for free etc, which to a degree might be “artificial” demand - Take Porsche GT cars as an example, in the past they depreciated like every other high end car and there was little demand for them - now suddenly, even with much higher production numbers (thousands and thousands of 991 RS cars ....) there are buyers paying a premium. I personally think demand (and therefore value retention) for these cars will suffer much more than McLaren as the people buying a McLaren already expect it to lose a packet and really want one, while I suspect a good number of GT buyers wouldn’t buy them if they were to lose 40-50% over 3-4 years.

Ferrari imo is slightly different as they have built a customer base over decades, but even those will start to depreciate much more imo given how much F is ramping up production/model numbers and cycles etc due to being listed now. Also the Challenge Stradale (a rather limited production number car) depreciated quite significantly, Scuderia the same and Speciales were also below list at some point (in Germany anyway)

Btw not buying back cars is clearly an issue, they should at least make an offer at a heavy discount to retail.

With regards to the warranty, I have said before that I think it is decent value for money. I pay nearly the same to warranty the Ferrari (which covers less imo) and more than that in annual insurance, so it is not that big of a cost item in the overall scheme of things imo - obviously not as cheap as Porsche, but the car costs double ....

footsoldier

1,417 posts

133 months

Friday 10th May
quotequote all
Three things put me off buying (another) one...
Depreciation
Reliability
Liquidity - ie even if you want to take a hit, then you might not find a buyer. This might be the most important point for me personally, and maybe they should refocus front-end incentives and discounts into supporting the used market.

Hard to think of another brand that combines all three, in a negative way.

Very annoying, especially the reliability, as they are good cars, but the underpinnings have been the same since launch, and should be fixed by now.

Warranty not a factor for me.

jimmyslr

691 posts

214 months

Friday 10th May
quotequote all
MDL111 said:
The sooner we get back to normality where the majority of sports cars loses about 50 percent of 3-5 years the better imo - then all these discussions as well as the “investment threads” and b.... fights over Porsche GT allocations will be over.
^ this. And I think we are on our way there now. I've ridden the sportscar market up and down for 15 years or so now and I prefer the cheaper phase of that market as it is more predictable, avoids having so much cash tied-up and means I can access the cars I want. Needing to be a "good customer" of the dealer to get a relatively mainstream car has caused me to lose a lot of love for the whole experience.

IMI A

6,572 posts

142 months

Friday 10th May
quotequote all
cypriot said:
IMI A said:
Here's cheapest good low miles 991 turbo s in UK.

http://www.nineexcellence.com/porsche-sales/sales-...

To save you doing the maths its held circa 67% of its original retail price 5-6 years on which is incredible. Mcl have some way to go to have their ordinary non LT vehicles doing that well. I'm hearing you can buy a virtually brand new 720s for £180k albeit not to your own spec. Thats not far off £100k off list on day 1!
Rather disingenuous post. You are quoting list price WITH NO OPTIONS for the turbo. So, using your method, a decently specced and relatively low milage 650s, 5 years old is £118k, which is 62% of its retail price. So, not too shabby, right?
A nicely specced gen 1 991 turbo s was £140k? That same car now selling for £95k. FWIW I think that’s a joke for a 5 yr old turbo s! Should be circa £70k to £75k that car IMO but even stronger 997 turbo s and 997 turbo gen 2 residuals so what do you do?

Matty3

197 posts

25 months

Friday 10th May
quotequote all
What I find totally baffling is why the Stuttgart Alumni need to constantly post on the McL forum?? - but actually I know and they know smile

Edited by Matty3 on Friday 10th May 22:51

Ferruccio

830 posts

60 months

Friday 10th May
quotequote all
Matty3 said:
the pool of potential buyers will continue to shrink and values will continue to plummet
How many new Indian and Chinese buyer do you think there’ll be over the next 10 years?

mickpsu

143 posts

88 months

Friday 10th May
quotequote all
Matty3 said:
What I find totally baffling is why the Stuttgart Alumni need to constantly post on the McL forum?? - but actually I know and they know smile

Edited by Matty3 on Friday 10th May 22:51
That made me laugh

fridaypassion

4,442 posts

169 months

Saturday 11th May
quotequote all
Im a Lotus guy looking at coming over and I see many of the same flaws in McLaren as Lotus. Over production- dealers buying up batches of cars from the factory. It's tempting and concerning in equal measure when you can walk into a dealership and get 30k off list. The model superceding thing has stopped at Lotus for now but was hugely damaging for them while it was going on.

From a noob perspective at the moment I think used is the sensible way to go. The warranty is seriously expensive although I was told a Mcused gets one year so with some man maths thrown in you could make yourself think that over two years it was £1500 per year.

The 570 is more of a Porsche competitor than an F or L car so as a punter you do kind of go in with the expectation that 2 years would be offered just because that's what your competitors are doing. Pre and post track inspections add another significant cost where Porsche don't care what you do with it.

Depreciation on new is concerning for anyone paying close to list. Don't forget that if for example if you pay 158k for a 570 new after 2 years it might be marketed at 115k but that nets back to you at just over 100 with sale costs. Of course this is mitigated by taking up one of the many offers out there on pre reg cars.

Ultimately McLarens priority is always going to be pumping more cars out of the factory. In a way the depreciation is a good thing as if nothing else it tempts poorpers like me into a type of car I didn't see as all that attainable. Over time there should hopefully be more potential customers to buy the used cars. McLaren are a young company in a crowded market so it should hardly be a shock that the used prices are low. I have to say though if you look at a 570 at 100k it makes almost all other choices at that price point look stupid. That's got to be a good thing.

mcl570

54 posts

19 months

Saturday 11th May
quotequote all
IMI A said:
Here's cheapest good low miles 991 turbo s in UK.

http://www.nineexcellence.com/porsche-sales/sales-...

To save you doing the maths its held circa 67% of its original retail price 5-6 years on which is incredible. Mcl have some way to go to have their ordinary non LT vehicles doing that well. I'm hearing you can buy a virtually brand new 720s for £180k albeit not to your own spec. Thats not far off £100k off list on day 1!
Just to say, that would be a heavily spec'd 720S to get to 280k new... most orders were spec'd to around about 250-260k.. am I right? and i'd be surprised if there are any brand new ones for 180k.. probably 200k-210k yes.

isaldiri

4,508 posts

109 months

Saturday 11th May
quotequote all
fridaypassion said:
The model superceding thing has stopped at Lotus for now but was hugely damaging for them while it was going on.

In a way the depreciation is a good thing as if nothing else it tempts poorpers like me into a type of car I didn't see as all that attainable. Over time there should hopefully be more potential customers to buy the used cars. McLaren are a young company in a crowded market so it should hardly be a shock that the used prices are low. I have to say though if you look at a 570 at 100k it makes almost all other choices at that price point look stupid. That's got to be a good thing.
Has the model superceding thing stopped at Lotus? The evora 400 became the 410 then the 430 very quickly. Same with the exige and/or exige cup.

The problem with £100k 570s is that people tend to associate running costs of the car with the purchase price and end up having very unrealistic expectations of how kuch a Mclaren should cost to run given the price they are buying the car at. To be fair I have some sympathy for that view, when the warranty for 5+ year old cars was raised to £5k (plus a very difficult last 10 months) it was the last straw for me wrt to deciding to keep my old 12c no matter how much I had liked it as £5k plus whatever servicing etc to run an £80k car (that one could expect to fall further) was just not worth it to me any longer.

IMI A

6,572 posts

142 months

Saturday 11th May
quotequote all
mcl570 said:
IMI A said:
Here's cheapest good low miles 991 turbo s in UK.

http://www.nineexcellence.com/porsche-sales/sales-...

To save you doing the maths its held circa 67% of its original retail price 5-6 years on which is incredible. Mcl have some way to go to have their ordinary non LT vehicles doing that well. I'm hearing you can buy a virtually brand new 720s for £180k albeit not to your own spec. Thats not far off £100k off list on day 1!
Just to say, that would be a heavily spec'd 720S to get to 280k new... most orders were spec'd to around about 250-260k.. am I right? and i'd be surprised if there are any brand new ones for 180k.. probably 200k-210k yes.
I think when I enquired a few years ago with track pack and one off colour it was definitely closer to £300k than £280k for a coupe. I think you're right though majority of cars sympathetically specced so around £250-260k. Lets take £200k purchase price thats still circa 25% off day 1 and lets say you needed some cash back quick and need to sell the same car you'd be lucky to sell at £150,000 if at all. In the absence of liquidity you're basically stuffed. Still an amazing car with amazing tech years ahead of competitors in many many ways. A better business model would have been to own all the dealerships themselves in order to better control QC, warranty fixes, supply and demand but the top brass management at Mcl seem determined to hit KPIs in their business plan/budget to impress shareholders rather than preserve the brand's iconic reputation for the medium and long term.

IMI A

6,572 posts

142 months

Saturday 11th May
quotequote all
Matty3 said:
What I find totally baffling is why the Stuttgart Alumni need to constantly post on the McL forum?? - but actually I know and they know smile

Edited by Matty3 on Friday 10th May 22:51
Mcl make no bones about wanting to take business from Porsche. I really hope they succeed smile